The Price of Freedom: Skill (95%) v Luck (5%)
A long-term investor is essentially investing in someone else’s skill at generating recurring revenue.
Whether Apple sells a new device or you earn money flipping burgers, both scenarios create ordinary income. This type of income is taxed differently—and generally at higher rates—than long-term capital gains.
Part of the reason lies in the skill and effort required.
Because these activities can happen repeatedly and in relatively short time spans, they’re considered ongoing, active streams of income rather than passive, long-term investments. As a result, the government classifies them as ordinary income and taxes them at ordinary income tax rates, which differ from the preferential treatment afforded to capital gains earned over longer holding period.
When people think of making money in the stock market, they often imagine buying a few shares of a well-known company and sitting back for years while the value (hopefully) goes up. This approach, commonly referred to as “buy-and-hold,” relies heavily on the stock market’s natural upward drift. Over long periods, markets do tend to rise, carrying many investors’ portfolios along with them. In this classic scenario, roughly 5–10% of an investor’s results can be attributed to specific decisions or skill—such as picking which company to buy—while the remaining 90–95% often just comes from the market’s overall growth trend.
In stark contrast, an ultra-short-term method flips that ratio on its head. Instead of capitalizing on the market’s slow and steady climb, the one can aim to extract small, consistent gains from fleeting market conditions—often measured in seconds. It relies on precise timing , hyper-focused analysis - when unique price distortions appear, skillful execution accounts for about 90–95% of the outcome.
Think of it this way: when you hold a stock for years, the stock market’s growth is doing most of the “heavy lifting,” and your skill might come into play mainly at the start (choosing which stocks to buy) and occasionally at the end (when to sell). Meanwhile, with the Minute System, you’re not depending on the stock market to wander upward over time.
Instead, you’re spotting small price bursts and dips that last seconds or minutes. If you handle these bursts perfectly—getting in and out with tight risk controls—you can capture profits largely independent of the broader market trend - 6X harder and requires 95% skill v luck.
In short, the difference boils down to how you’re making money. The traditional buy-and-hold investor rides the market’s long-term upward wave, with only a small portion of the outcome driven by active decisions.
On the other hand, constantly makes rapid-fire choices—entering and exiting positions at near-perfect times—so success is heavily determined by skill.
